Bill > A07786

This bill provides a comprehensive framework for restructuring unsustainable sovereign and subnational debt, with a focus on creating an equitable and orderly process for debt relief. The proposed legislation allows a debtor state (which can be a sovereign nation, unincorporated territory, or subnational unit) to voluntarily file a petition for debt restructuring under New York law. The bill establishes a detailed process that includes notifying creditors, reconciling debt claims, and submitting a restructuring plan that must be agreed upon by at least two-thirds of creditors in each class of claims. A key innovation is the appointment of an independent monitor to facilitate fair negotiations, and the bill provides mechanisms for financing the restructuring, including allowing the debtor state to borrow money with creditor approval. The legislation aims to reduce social and economic costs of debt crises, minimize systemic financial risks, and protect New York's role as a global financial center. It also includes provisions for burden-sharing among creditors and establishes standards for claim recoverability, with a particular emphasis on protecting the most vulnerable populations while respecting creditor rights. The bill applies both retroactively and prospectively and allows creditors to opt-in to its provisions voluntarily.

Justice

https://www.nysenate.gov/legislation/bills/2025/A7786